LIGHTPATH TECHNOLOGIES INC

As of September 30, 2024, we had working capital of approximately $7.1 million and total cash and cash equivalents of approximately $4.3 million, of which, less than 50% of our cash and cash equivalents was held by our foreign subsidiaries.

Cash and cash equivalents held by our foreign subsidiaries in China and Latvia were generated in-country as a result of foreign earnings. We routinely declare intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to us, as the U.S. parent company. It is still our intent to reinvest a significant portion of earnings generated by our foreign subsidiaries, however, we also plan to repatriate a portion of their earnings, and we accrue for these taxes on the portion of earnings that we intend to repatriate.

In China, before any funds can be repatriated, the retained earnings of the legal entity must equal at least 50% of the registered capital. As of September 30, 2024, LPOIZ had approximately $1.6 million available for repatriation and LPOI did not have any earnings available for repatriation, based on earnings accumulated through December 31, 2023, the end of the most recent statutory tax year, that remained undistributed as of September 30, 2024.

As of September 30, 2024, loans payable consists of two third-party equipment loans and the Bridge Note. See Note 12,Loans Payable, in the unaudited Condensed Consolidated Financial Statements, for further information.

On February 16, 2022, we filed a shelf registration statement to facilitate the issuance of our Class A common stock, warrants exercisable for shares of our Class A common stock, and/or units up to an aggregate offering price of $75.8 million from time to time. In connection with the filing of the shelf registration statement, we also included a prospectus supplement relating to an at-the-market equity program under which we may issue and sell shares of our Class A common stock up to an aggregate offering price of $25.2 million from time to time, decreasing the aggregate offering price available under the shelf registration statement to $50.6 million. The shelf registration statement was declared effective by the SEC on March 1, 2022. During the year ended June 30, 2024, we issued 585,483 shares of our Class A common stock pursuant to the at-the-market equity program. No additional shares were issued under this program during the three months ended September 30, 2024.

On January 12, 2023, the Company entered into a securities purchase agreement (“Purchase Agreement”), pursuant to which the Company agreed to issue and sell in a public offering under the shelf registration statement an aggregate of 9,090,910 shares of the Company’s Class A common stock, par value $0.01 per share for a purchase price of $1.10 per share and filed a prospectus supplement with the SEC related thereto. The sale of shares pursuant to the Purchase Agreement closed on January 17, 2023, and resulted in net proceeds of approximately $9.2 million after payment of placement agent fees, and certain other costs and expenses of the offering.

There are a number of factors that could result in the need to raise additional funds, including a decline in revenue or a lack of anticipated sales growth, increased material costs, increased labor costs, planned production efficiency improvements not being realized, increases in property, casualty, benefit and liability insurance premiums, and increases in other costs. In addition, we may identify opportunities for acquisitions and other strategic transactions to expand and further enhance our business that may require that we raise additional capital should we elect to pursue any of such transactions.

Cash Flows – Operating:

Cash used in operations was approximately $1.7 million for the first quarter of fiscal 2025, compared to cash provided by operations of approximately $1.1 million for the same period of the prior fiscal year.Cash used in operations for the first quarter of fiscal 2025 was primarily due to payments against accounts payable and accrued liabilities, as well as an increase in accounts receivable driven by higher sales in the first quarter of fiscal 2025 than in the preceding quarter. Cash provided by operations for the first quarter of fiscal 2024 was largely driven by decrease in accounts receivable, as sales were higher in the fourth quarter of fiscal 2023 than in the first quarter of fiscal 2024.

Cash Flows – Investing:

During the first quarter of fiscal 2025, we expended approximately $0.1 million in investments in capital equipment, compared to approximately $1.0 million in the same period of the prior fiscal year. The capital spending in the first quarter of fiscal 2024 was largely driven by the Orlando Facility expansion. As disclosed in Note 11,Leases, in the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, we constructed additional tenant improvements in our Orlando Facility subject to our continuing lease, of which the landlord agreed to provide $2.4 million in tenant improvement allowances. We funded the balance of the tenant improvement costs of $3.7 million over fiscal years 2023 and 2024. We also expended approximately $0.1 million during the first quarter of fiscal 2025, compared to $0.6 million during the same quarter of the prior fiscal year, to acquire Visimid, net of cash acquired, as disclosed in Note 3,Acquisition of Visimid Technologies, in the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The first quarter of fiscal 2024 also reflected proceeds of approximately $365,000 from sale-leasebacks of equipment.

Cash Flows – Financings:

Net cash provided by financing activities was approximately $2.6 million for the first quarter of fiscal 2025, compared to cash used in financing activities of approximately $0.2 million in the same period of the prior fiscal year. Cash provided by financing activities for the first quarter of fiscal 2025 primarily reflects the $2.7 million in net proceeds from the Bridge Note, plus approximately $10,000 in proceeds from the sale of Class A common stock under the 2014 ESPP, offset by approximately $94,000 in principal payments on our loans and finance leases. Cash used in financing activities for the first quarter of fiscal 2024 reflects $234,000 in principal payments on our loans and finance leases, offset by approximately $20,000 in proceeds from the sale of Class A common stock under the 2014 ESPP.